The ‘real reason’ Poundland is closing stores on UK high streets | UK | News
There is a wave of closures in Poundland across the UK, with more than 100 stores closed or about to close since the summer. The discount chain, one of the biggest winners of the post-2008 economic recession, has entered one of the most turbulent periods in its history. The retailer is now disappearing from the high street as people seek affordable food due to the cost of living crisis.
Poundland’s biggest problem is its own name. Selling everyday items for £1 doesn’t work as well as it once did; A £1 item when Poundland was launched in 1990 is worth just 40p today after inflation. This shift has quietly undermined the entire economics of value retailing. Similar companies such as OneBeyond have already abandoned the strict £1 model altogether. “We realized the pound game wasn’t going to work anymore,” Chris Edwards, who previously founded the chain, told the BBC. Supply chain issues and rising shipping costs in the wake of the pandemic have revealed how fragile the old formula has become.
Moreover, all retailers have been hit by high wage bills and rising national insurance premiums. There’s no easy buffer for chains that already sell on razor-thin margins. Budget retailers can’t raise prices as easily as supermarkets without losing their core customers.
Pepco Group, which owns Poundland, has also moved away from its roots, confusing shoppers with a wider price mix and trying to push clothing ranges that have never quite caught on. But the retailer has already simplified its pricing, aiming to improve things with a turnaround plan. This includes closing 57 unprofitable stores and negotiating steep rent reductions elsewhere.
Another factor, BBC reported, is the rise of ultra-cheap online platforms such as Temu, Shein and AliExpress. Without physical stores, large numbers of staff or UK business rates, these platforms can undercut almost any high street discount retailer. Amazon has also entered this space by launching its own low-cost division.
Chains such as The Range, Home Bargains and Savers continue to grow. However, analysts warn that the industry is entering a period of consolidation in which only the strongest can survive.
Elsewhere on Britain’s high streets, the Original Factory Store is struggling and has closed at least 22 stores. Maxideal, a small discount chain, has closed completely. B&M Bargains, one of the UK’s largest discount chains, launched a recovery plan due to weak sales.
